Iranians think otherwise. Iran, which has the world's second-largest gas reserves after Russia, has said that it had reached a preliminary agreement with Ukraine for exporting 30 billion cum/yr, but Ankara shrugs this off. "This is not the most realistic option," a senior energy official said. "Physically, there is no such line. Besides, politically, neither Russia nor Turkey would allow their territorial waters to be used for such a line." Turkey has pressed Iran unsuccessfully for upgrading of its gas deliveries, and end to interruptions in gas flow, and price cuts as well as a deal for re-exporting gas to third countries. The country's officials have been aware that Iran had long been talking to Ukraine, but think this was aimed at putting pressure on Turkey. Despite a lack of progress, officials said the talks with Iran would not stop. "Turkey is still the only option for the sale of Iranian gas to Europe," the same official said. "Pumping natural gas through Ukraine will serve no purpose. Iran will anyway be in a position to use the Nabucco line when it starts operating in 2006." The Nabucco pipeline project is aimed at extending natural gas pipelines from Turkey to Hungary and Austria through the eastern Balkans, with Iran as one of the potential suppliers along with some other Middle East and Caspian basin countries. Meanwhile, Iran has agreed to export up to 30 billion cum/yr of gas to Ukraine, and Ukraine has also agreed to export up to 20 billion cum/yr of Iranian gas to Europe through its own installations, according to a memorandum of understanding signed between Tehran and Kiev at the end of July. Iran and Ukraine plan to invite the countries on the route of the pipeline – Georgia, Armenia, and Russia – to a conference in Tehran in mid-September to talk about the pipeline project, and how to implement it. Iranian officials believe the deal with Ukraine has solved Iran's problem of selling its gas to Europe through its western neighbour, Iraq.